Plant-based meats yield real returns for QSR operators
The wildly popular Impossible Burger has QSR brands rethinking non-meat offerings.
There’s just nothing better than biting into a tasty burger: the melty cheese, the crunch of pickles and onions, the soft texture of a fresh, warm bun and the soy leghemoglobin trickling down your hand.
As you may have heard, a burger isn’t just animal protein anymore. That soy leghemoglobin is what makes the plant-based Impossible Burger “bleed” with pinkish liquid and gives the explosively popular patty a meatier taste. Now, brands are racing to get plant-based meats on the menu as fast as possible. The reason? As unappetizing as soy leghemoglobin sounds, consumers are demanding better-tasting (if not really better-for-you) plant-based alternatives, and serving them up has become job No. 1 for culinary leaders across the quick-service restaurant landscape.
The trend started small in New York hotspots in 2016, where taking the nascent Impossible Burger home as leftovers was explicitly verboten in case someone were to reverse engineer the non-meat. But in 2017, New York-based franchise Bareburger started serving Impossible Burgers, and Fatburger soon followed.
Parent Impossible Foods had some supply chain issues for early adopters. It wasn’t output of the product, however, but the shape.
“They had some production issues,” said Andy Wiederhorn, CEO of Fatburger. “But they ended up giving us bulk production instead of a patty product, that’s how they solved it.”
Wiederhorn said his company—including Elevation Burger, Buffalo’s and Hurricane Grill and Wings—sold about 1 million of the plant pucks in 2019. “It’s approaching 5 percent of sales for us, that’s a big number,” he said.
The Impossible Burger comes frozen and pre-formed, making meat-free operations easy.
There have been few operational changes to keep up with that demand, said Wiederhorn. The key characteristic is that the patties arrive frozen so there’s no added product waste or much to do aside from find a little room in the freezer.
That’s what Burger King operator GPS Hospitality saw, too. COO Michael Lippert said it’s been relatively pain free to bring in the Impossible Whopper. He said it was an incredible way to tap into the generational shifts in how people consume food.
“If you look at what’s going on with the population and millennials in particular, and changes in lifestyle, it’s not as much about a vegan lifestyle, but about healthy alternatives to eating traditional proteins,” said Lippert. “So when Burger King was able to secure the product availability through a partnership, it became an obvious big win. The benefits of the win go far beyond just serving a plant-based product.”
And it proved to be a big win at the restaurant level. According to Restaurant Brands International, the parent company of Burger King, Popeyes and Tim Hortons, the plant-based burger contributed greatly to a 2 percent increase in traffic for BK. Lippert said that’s about what GPS saw as well.
“We saw an uptick, we witnessed transactions that were incremental transactions. And so for our business, during the peak weeks, we sustained an average of 43 Impossible Whoppers a day during the course of that four- to six-week period,” said Lippert.
He said they’re still selling about 20 a day and an analysis by GPS showed the Impossible Whopper made up 9.5 percent of all Whopper patties in September 2019, after the major national marketing campaign. That’s impressive staying power in a trend-heavy segment of food.
Lippert said the incrementality continues as well. While it’s always hard to measure that kind of thing scientifically, he said as much as 60 percent of those transactions are incremental, something confirmed by looking at guest comments for trends.
“For the first several weeks we were looking for keywords like, ‘New to Burger King,’ ‘Haven’t been in a while’—we saw a significant portion of those comments,” said Lippert. “Then we saw quite a few guests commenting that they were able to add it to their routine because it was another vegetarian option.”
Pondering the price
Menu pricing of plant-based alternatives is a tricky balance. Does a company keep costs at traditional QSR levels and push volume? Or does it raise prices to match the higher cost of goods?
For Burger King, the Impossible Whopper runs about $5.60 for the sandwich alone. That’s about $2 more than a typical Whopper, but still one of the most value-forward price points for an Impossible product. But clearly, Burger King is doing some serious volume.
Wiederhorn, however, said because the cost of goods is much higher than a traditional beef patty, he’s charging a higher price.
“There’s no choice to that. It’s an expensive product so you have to adjust your price, you have to,” he said. “It’s an $8 or $9 burger, not a $6 burger.”
He said within Fatburger’s mostly California and West Coast footprint, there really wasn’t a reason to lose money because of how incremental the product sales were.
“There was no reason to discount. You have a product that is a specialty item; customers have shown significant flexibility to be willing to pay for it. So don’t discount it, price it properly and maintain your margin, and customers will pay if they want it,” said Wiederhorn. “Do not lose money on it.”
He said the company also began selling a vegan milkshake at $10, and people are buying plenty of those, too.
Beyond burgers, there are plenty of tests and other offerings. Right now, Fazoli’s is testing a plant-based Impossible meat sauce spaghetti in limited markets and seeing similar incrementality. At Del Taco, it took a lot of work by the culinary team, but it has Beyond Meat as an alternative for tacos, burritos and everything else.
How exactly plant-based proteins get to the consumer is up to the brand and the concept, but there’s good reason for putting in the work. People want it, they’re wiling to pay and above all, it’s become a true source of new traffic, something the entire restaurant space is starving for these days.
“If you’re not on the plant-based protein bus or train, you’re going to miss the whole adventure, you have to engage and be part of it,” said Wiederhorn.
The beef with non beef
Amid all the excitement for plant-based meat alternatives, there is a very vocal, litigious cohort who wants to keep the hallowed burger as beef only.
There’s been backlash against plant-based burgers, from beef-producing states, meat lobbying groups and even health-food enthusiasts. There have been a handful of lawsuits saying the plant-based products can’t use terms such as “meat” or “burger” and some state laws that do the same. The ACLU has even taken up the cause, arguing on behalf of Tofurky, the company that produces tofu-based protein alternatives, that such laws are unconstitutional on grounds of free speech.
So what’s the big deal? For the meat producers, it’s pretty clear that they don’t want to lose the market share on their burger turf. But they argue consumers may be confused by such terms, and mistakenly buy a non-meat burger by accident—the horror. Perhaps they’d prefer brands call such items what they are: water and pea protein isolate sandwiches. (Best of luck to the marketing team.)
There are complaints from healthy eaters and eco-conscious and advocates as well. The healthy eaters say ingredients in plant-based meats are extremely processed, and they’re not wrong. It’s a wildly intensive process to isolate pea or soy protein and reform it as a ground-meat facsimile. It takes plenty of other ingredients, from simple beet juice and pomegranate powder, to add color, to food additives such as coconut oil and modified starches. And there’s all sorts of bizarre ingredients, from potassium chloride—typically used as an electrolyte—to Methylcellulose, a non-digestible but inert thickening agent. As for soy leghemoglobin, the FDA just approved it. Plant-based burgers do contain more sodium and saturated fats than beef.
As for the carbon watchers, their claims have largely been debunked. One article claimed it would take the eating of a traditional beef burger to undo the environmental harm of one Impossible Burger. That’s just wrong. Researchers at Vanderbilt University found Impossible Burger had an 89 percent smaller carbon footprint than traditional beef. Even with processing, the burger uses 87 percent less water, 96 percent less land and contaminates water 92 percent less than traditional beef.